Hockey To Tackle Online GST

Federal Treasurer Joe Hockey is to take a stick to online GST when he meets state treasurers this week.

The first Standing Council on Federal Financial Relations meeting since the Coalition came into power will take place in Canberra this Wednesday at 8.30am (AEST).

The meeting will focus on economic growth, and one item on the agenda will be the options for lowering the GST threshold on goods purchased from international retailers.

The GST threshold for goods purchased online from abroad stands at $1,000, meaning lots of goods purchased from overseas websites are currently not charged GST, something which local retailers claim gives overseas operators an unfair advantage.

There have been proposals from NSW Treasurer Mike Baird to lower this threshold to $30.

However, a report from Productivity Commission last year found the cost of processing low value parcels coming through customs would exceed any revenue collected from changing the rules.

The report called for "significant change" to the way imported parcels were processed.

The online GST debate has been raging for some time, first prompted by calls for reform from Gerry Harvey and other retailers back in 2011.

"It is about time we had a genuine discussion on the issues that matter and it's clear that under the new federal government this is what we are going to see," Baird told AAP.

Betta CEO, Graeme Cunningham, recently told CN, he believes "an increase in GST, in isolation, would have a potential negative effect on consumer confidence". Consumer groups including Choice are opposed to GST reform.